Iowa State University’s in-progress CYTown development is close to securing a $50,000-a-year contract and a $3 million security deposit with its first tenant.
Iowa State is asking the Iowa Board of Regents on Wednesday to authorize a 30-year contract with McFarland Clinic for 30,000 square feet of property between Jack Trice Stadium and Hilton Coliseum in Ames.
McFarland’s initial $50,000 base rent will increase by $5,000 intervals each year through the end of the lease. The medical company will pay for the construction of its newest clinic off University Boulevard, though Iowa State will takeover ownership when finished and lease it to McFarland.
A new partnership for an ambitious project
The 40-acre CYTown development will include a collection of retail, residential, office, and medical facilities between the Iowa State Center and Jack Trice Stadium. The first phase of construction is already underway, which Iowa State expects to complete by August 2025.
McFarland Clinic is the only business so far to pledge its commitment to CyTown, revealing last September its plan to construct a 70,000 to 80,000-square-foot multi-level facility as the development’s anchor.
The terms of the McFarland-Iowa State lease were negotiated and agreed upon by both entities and are unique to that specific transaction, ISU News Service Director Angie Hunt said.
The university is not implementing a flat fee for its future tenants, which means each new agreement will be dependent on negotiations.
“Financial terms for future leases with other tenants will be negotiated through the university’s development partner and will contain different financial terms dictated by the needs of each transaction and the overall goals of the project,” Hunt said.
Due to the $5,000 per year increments, McFarland will pay Iowa State $200,000 in the final year of the contract. According to an agreement on the Board of Regents agenda, McFarland will have the option to extend their lease with Iowa State in five-year increments after the 30-year lease expires up to an additional 20 years.
The clinic will also be responsible for the building’s utilities and “Common Area Maintenance (CAM) fees” throughout the length of the lease, according the Board of Regents agenda.
More: Ames, Iowa State agree to funnel CYTown revenue toward Iowa State Center renovations, property tax undecided
McFarland aims to provide necessary, accessible services
The CYTown medical facility will be McFarland’s seventh standalone clinic in Ames. It will offer primary, specialty, and urgent care.
The facility will be built on the south end of the CYTown development, off Jack Trice Way, near the football stadium. McFarland wants its newest facility to be easily accessible for patients inside and outside Ames.
The clinic will provide Iowa State’s student-athletes with access to orthopedic services and imaging equipment. It would also complement the ISU Thielen Student Health Center, located on the west side of the central campus, by providing after-hours and weekend services.
More: Iowa State University selects developer for $200 million CYTown project
Iowa State may be authorized to funnel taxes toward Iowa State Center renovations
Iowa State is also asking the Board of Regents Wednesday to allow the university to enter into a Memorandum of Understanding with the City of Ames. The agreement would establish a Payment in Lieu of Taxes (PILOT) arrangement between the two entities.
The MOU contract allows ISU Athletics to collect rent from CYTown tenants and allocate those funds to the buildings that make up the Iowa State Center: Hilton Coliseum, Stephen’s Auditorium, Fisher Theatre, and the Scheman Building. The Ames City Council approved the MOU on Tuesday, May 14.
According to local officials, the city entered into the agreement as an “innovative way” to finance the improvements at the Iowa State Center. Whether Iowa State will pay property taxes for CYTown remains undetermined. In the meantime, the Ames council chose to focus on its long-term goal of bringing people to town.
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Celia Brocker is a government, crime, political and education reporter for the Ames Tribune. She can be reached at [email protected].
This article originally appeared on Ames Tribune: How much will McFarland pay ISU to become CYTown’s first tenant?
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